Amazon's strategic shift towards offering everyday essentials like Toothpaste and Detergent has reportedly had a dual impact on its business. While it has boosted sales volume and customer frequency, it has also led to a decline in average selling prices (ASP).
According to a report by news agency Reuters, this move is said to be a strategic response to increasing competition from Chinese fast-fashion retailers like Shein and Temu, who have disrupted the market with ultra-low prices and rapid shipping times. By stocking up on everyday items, Amazon aims to maintain its competitive edge and capture a larger share of consumer spending. "The strength in everyday essentials revenue is a positive indicator that customers are turning to us for more of their daily needs," said Amazon's Chief Financial Officer Brian Olsavsky. "We see that when customers purchase these types of items from us, they build bigger baskets, shop more frequently and spend more on Amazon."
People are shopping more frequently at Amazon, adding more low-priced items with each checkout, Amazon said on Thursday, after it reported third-quarter revenue and profit that beat Wall Street expectations.

Over the last few years, Shein and Temu have quietly joined the ranks of the most popular shopping websites in the US. While Shein specialises in low-end women’s fashion, Temu focuses on home decor and household items. According to SensorTower data, Temu had 47 million US monthly active users in April, while Shein had 29 million. By focusing on trendy fashion items and leveraging a low-cost manufacturing model, Shein and Temu have captured a significant market share, particularly among younger consumers.
Taking notice of this rising competition from China, Amazon has reportedly shifted focus away from traditional rivals like Walmart and Target and toward Shein and Temu. In December 2023, Amazon announced a sharp reduction in the fees it charges sellers for clothing items under $20, a move said to be aimed to ensure its prices were competitive with Shein.
Now as Shein expands its product range to include everyday essentials, it could further erode Amazon's market share. Earlier this year, Shein entered skincare and personal care brands such as Colgate-Palmolive to sell more household names on the platform. It launched a third party marketplace in 2023 to expand its product selection to include beauty and personal care products, household items and furniture.

To mitigate the impact of lower ASPs, Amazon is leveraging its extensive logistics network to reduce costs and improve delivery times. By optimising its supply chain and warehouse operations, the company can offer competitive prices while maintaining profitability.
To further navigate this complex landscape, Amazon plans to continue investing in technology, innovation, and customer experience. By offering personalised recommendations, seamless checkout, and fast delivery, the company can differentiate itself from competitors and maintain its position as a leading e-commerce platform.
However, this strategy is not without its challenges. As Amazon prioritises volume over value, it risks diluting its brand image and eroding profit margins. The company must carefully balance its focus on everyday essentials with its core strength in high-margin electronics and premium products.